Disposal of leases within the port of Durban SA Corporate Real Estate Limited (Incorporated in the Republic of South Africa) Share Code: SAC ISIN Code: ZAE000203238 (Registration number 2015/015578/06) (“SA Corporate” or the “Company”) REIT status approved DISPOSAL OF LEASES WITHIN THE PORT OF DURBAN 1. INTRODUCTION Shareholders are advised that SA Corporate has entered into an agreement with Grindrod Property Holdings Limited (“Grindrod Property” or “the Purchaser”), a wholly owned subsidiary of Grindrod Limited, to dispose of various letting enterprises comprising head leases (“Head Leases”) and underlying sub-leases (“Sub-leases”) (the “Leases”) held over five properties (the “Properties”) based within the Port of Durban (the “Disposal”). The Properties are leased to wholly owned subsidiaries of the Company, which in turn sub-lease the Properties to Grindrod South Africa Proprietary Limited. The effective date of the Disposal will be the date on which the cession of the Leases is registered into the name of the Purchaser at the Deeds Office, which is anticipated to be by the end of September 2020. 2. DETAILS OF THE DISPOSAL 2.1. Disposal consideration SA Corporate, via its subsidiaries, will dispose of the Leases via a sale of letting enterprises and a “cession of leases” to Grindrod Property for a consideration of R212 million, exclusive of VAT (“Disposal Consideration”). The Disposal Consideration will be settled by the Purchaser against registration of the Leases into the name of Grindrod Property. 2.2. Rationale and use of proceeds The Disposal is aligned to SA Corporate’s strategy of divesting from leasehold properties that reflect diminishing value and do not meet its industrial property portfolio primary investment criteria of modern logistics. The Disposal Consideration will be initially utilised to increase the Company’s cash reserves. 2.3. Conditions precedent The Disposal is subject to the following conditions precedent: 2.3.1 Competition Commission approval; and 2.3.2 consent by the mortgagee to the cancellation of the existing mortgage bonds over the Head Leases. 2.4. Value of the net assets and profits attributable to the net assets of the Disposal The assets that are the subject of the Disposal were valued at R220.8 million as at 31 December 2019. The annual net property income in respect of the year ended 31 December 2019 attributable to the assets that are the subject of the Disposal was R20.48 million. This information has been extracted from SA Corporate’s audited annual financial statements for the year ended 31 December 2019, which have been prepared in terms of International Financial Reporting Standards. 3. DETAILS OF THE HEAD LEASES AND PROPERTIES 3.1. Details of the Head Leases are as follows: Head Lease lessee Property description Head Lease expiry date Blue Heron Investments Proprietary Limited Lease 32 of Lot 10014 1 December 2029 ("Blue Heron") Lease 33 & 34 of Lot 10014 1 December 2029 Lease 35 of Lot 10014 1 June 2041 Dune Lark Investments Proprietary Limited Lease 29 & 30 of Lot 10014 7 January 2030 ("Dune Lark") Lease 15 of Lot 10014 20 October 2041 Grey Heron Investments Proprietary Limited Lease 36 of Lot 10014 1 July 2028 ("Grey Heron") Lease 37 of Lot 10014 1 February 2037 Rock Kestrel Investments Proprietary Limited Lease 56 of Lot 10014 1 August 2030 ("Rock Kestrel") Wood Ibis Investments Proprietary Limited Sub 1, 2, 4, 5, 6 Block M of 1 April 2054 ("Wood Ibis") Lot 10014 1 April 2054 Rem of Sub 3 Block M of Lot 10014 The Properties are currently sub-let for storage for fertilizer, fluorspar and various minerals as well as container handling. 3.2. Details of the Properties are as follows: Head Lease Location Sector Rentable Weighted Value of the lessee area average rental* Properties per m2 (m2) (R) (R’000) Blue Heron Cnr Shadwell & Logistics and 14 587 34.22 64 000 Jenkyn Roads, warehousing Maydon Wharf, Durban Dune Lark 34 Shadwell Road, Logistics and 13 091 38.06 47 000 Maydon Wharf, warehousing Durban Grey Heron 137 Johnston Road, Logistics and 7 394 34.22 30 000 Maydon Wharf, warehousing Durban Rock Shadwell Road, Container yard 398 12.02 7 800 Kestrel Maydon Wharf, Durban Wood Ibis Methven Road, Logistics and 18 060 35.72 72 000 Maydon Wharf, warehousing Durban * Net of land lease rental. 4. CATEGORISATION The Disposal constitutes a Category 2 transaction in terms of the JSE Limited Listings Requirements and accordingly, no shareholder approval is required. Cape Town 12 June 2020 Corporate sponsor Nedbank Corporate and Investment Banking Date: 12-06-2020 05:30:00 Produced by the JSE SENS Department. 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